Huawei chair sees difficult year ahead despite record 2019

huawei logo at mwc 19
Huawei expects that 2020 will be difficult, with the chairman telling workers that "survival will be our first priority." (Huawei)

Huawei revenues hit $122 billion in 2019, marking a record amid stormy trade restrictions imposed largely by the U.S.

Huawei chairman Eric Xu reported the revenues in a New Year’s message to the company’s nearly 200,000 employees. He said revenues grew by 18%. Huawei also shipped about 240 million smartphones in 2019, up by 17% over 2018.

“We won’t grow as rapidly as we did in the first half of 2019, growth that continued throughout the year owing to sheer momentum in the market,” Xu said. “It’s going to be a difficult year for us…Survival will be our first priority.”

He also said that Huawei doesn’t expect to be removed from a U.S. blacklist which came in the form of being added to the U.S. Commerce Department “entity list” first imposed last May.

That listing prevents U.S. companies from supplying Huawei with their chips, other hardware and software, unless the products are made outside the U.S. Google’s Android apps cannot be used in Huawei smartphones, for example. Huawei has reacted by bolstering its own components, including chips fabricated by its own HiSilicon.

Some U.S. chipmakers have sought special permits around the blacklisting and have reported seeing an impact on their 2019 sales. However, overall U.S. sales by companies that can still sell to Huawei are only a small part of Huawei's purchases with about half of all purchases coming from China.

The U.S. imposed the entity listing on Huawei amid continuing concerns about the security of Huawei products for telecom companies that might install them and become subject to Chinese government spying. However, Huawei, a private company, insists it will not share customer data with the Chinese government and works for its customers in nearly 200 countries. Even so, the U.S. security establishment has noted that many Huawei employees were formerly associated with Chinese spying operations.

Australia and New Zealand have blocked Huawei from their 5G networks, but Germany has indicated it won’t exclude Huawei.

One important factor in Huawei’s relationship with the U.S. and the Trump Administration is what happens to Meng Wanzhou, the Huawei finance chief put under house arrest in Vancouver for more than a year. The U.S. is seeking to extradite her for allegedly evading sanctions on Iran, charges which she and Huawei deny.

She is the daughter of Huawei founder Ren Zhengfei.

Xu’s message to employees concluded on a note of challenge: “The US government's campaign against Huawei is strategic and long-term. It's a great opportunity for us to motivate ourselves and build up some muscle. A great opportunity for us to be more united as a team,and develop the capabilities we need to better navigate future challenges.”

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